TACOMA, Wash., Oct. 29, 2015 /PRNewswire/ -- Melanie
Dressel, President and Chief Executive Officer of Columbia Banking
System and Columbia Bank (NASDAQ: COLB) ("Columbia"), said today upon the release of
Columbia's third quarter 2015
earnings, "The balance sheet growth combined with our ongoing
efforts to increase noninterest income and curb expenses resulted
in record net income for the quarter. The Pacific Northwest economy
continues to be favorable for businesses as evidenced by our record
loan production and outstanding deposit growth during the third
quarter. Our bankers have worked diligently to grow loans and
increase core deposits, resulting in a relatively stable operating
net interest margin despite the prolonged low interest rate
environment."
Balance Sheet
Loans were $5.75 billion at
September 30, 2015, up $134.6
million from June 30, 2015 due to record loan
originations during the current quarter. Securities were
$2.04 billion at September 30,
2015, an increase of $111.4 million,
or 6% from $1.93 billion at
June 30, 2015 due primarily to purchases of securities
resulting from deposits growing in excess of loans. Total deposits
at September 30, 2015 were $7.31
billion, an increase of $270.4
million from $7.04 billion at
June 30, 2015. Core deposits were $6.99
billion at September 30, 2015, an increase of
$248.2 million from June 30,
2015. The average rate on interest-bearing deposits and total
deposits for the quarter was 0.08% and 0.04%, respectively,
unchanged compared to the second quarter of 2015.
Income Statement
Net Interest Income
Net interest income for the third quarter of 2015 was
$81.7 million, an increase of
$684 thousand compared to the second
quarter of 2015. This increase was primarily due to higher average
loan balances in the current quarter. Compared to the third quarter
of 2014, net interest income increased by $5.5 million from $76.2
million. The increase from the prior year period is due to
the combination of acquired loans and securities from the
November 1, 2014 acquisition of
Intermountain Community Bancorp ("Intermountain") and organic loan
growth, partially offset by a decline in incremental accretion
income. For additional information regarding net interest income,
see the "Average Balances and Rates" table.
Noninterest Income
Total noninterest income was $22.5
million for the third quarter of 2015, an increase of
$1.0 million compared to $21.5 million for the second quarter of 2015. The
linked quarter increase was primarily due to an increase in other
noninterest income of $1.3 million
which resulted from gains on sales of loans in the current quarter
of $1.1 million compared to
$43 thousand in the second quarter of
2015.
Compared to the third quarter of 2014, noninterest income
increased by $6.6 million due to both
a $1.6 million increase in service
charges and other fees and the change in FDIC loss-sharing asset.
The growth in service charges and other fees resulted primarily
from the increased customer base from the acquisition of
Intermountain. Additional details of the components of the change
in the FDIC loss-sharing asset are provided in tabular format
below.
The change in the FDIC loss-sharing asset has been a significant
component of noninterest income, but over time the significance has
diminished. The following table reflects the income statement
components of the change in the FDIC loss-sharing asset:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(in
thousands)
|
Adjustments reflected
in income
|
|
|
|
|
|
|
|
|
Amortization,
net
|
|
(1,416)
|
|
|
(3,992)
|
|
|
(5,086)
|
|
|
(16,208)
|
|
Loan
impairment
|
|
(119)
|
|
|
(416)
|
|
|
1,413
|
|
|
2,735
|
|
Sale of other real
estate
|
|
(126)
|
|
|
(383)
|
|
|
(753)
|
|
|
(2,104)
|
|
Write-downs of other
real estate
|
|
25
|
|
|
67
|
|
|
1,148
|
|
|
860
|
|
Other
|
|
1
|
|
|
(92)
|
|
|
299
|
|
|
32
|
|
Change in FDIC
loss-sharing asset
|
|
$
|
(1,635)
|
|
|
$
|
(4,816)
|
|
|
$
|
(2,979)
|
|
|
$
|
(14,685)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
Total noninterest expense for the third quarter of 2015 was
$64.1 million, a decrease of
$4.4 million compared to $68.5 million for the second quarter of 2015.
This decrease was driven by lower acquisition-related expenses in
the current quarter of $428 thousand
compared to $5.6 million in the prior
quarter. After excluding the effect of the acquisition-related
expenses, noninterest expense for the current quarter was
$811 thousand higher than the second
quarter of 2015 on the same basis. This increase was due to OREO
costs, which were $240 thousand in
the current quarter compared to a benefit of $563 thousand for the second quarter of 2015. In
addition, during the third quarter of 2015 Columbia experienced
unusually high fraud losses largely attributed to debit card
activity. Fraud losses for the third quarter were $834 thousand, up $546
thousand from the second quarter of 2015.
Clint Stein, Columbia's Executive Vice President and Chief
Financial Officer, stated, "As we approach the one year anniversary
of closing the Intermountain acquisition, we have achieved our
post-integration target expense run rate of less than $64 million per quarter. The realization of our
expense goal ahead of our anticipated timeframe coupled with the
growth in revenue during the quarter resulted in the efficiency
ratio improving to below 60%."
Compared to the third quarter of 2014, noninterest expense
increased $4.1 million, or 7% from
$60.0 million, due to both increased
expenses resulting from the Intermountain acquisition as well as
additional OREO costs, partially offset by a decrease of
$2.8 million in acquisition-related
expenses.
Net Interest Margin ("NIM")
Columbia's net interest margin
(tax equivalent) of 4.37% for the third quarter of 2015 decreased 4
basis points from 4.41% for the second quarter of 2015. Compared to
the third quarter of 2014, Columbia's net interest margin decreased 48
basis points from 4.85%, primarily due to lower incremental
accretion on acquired loans, which was $9.4
million for the prior year quarter, compared to $6.4 million for the current quarter.
Columbia's operating net interest
margin (tax equivalent)(1) was 4.18% for the third
quarter of 2015, an increase of 1 basis point from 4.17% for the
second quarter of 2015 and down 4 basis points compared to 4.22%
for the third quarter of 2014 as a result of the continuing low
interest rate environment.
The following table shows the impact to interest income
resulting from accretion of income on acquired loan portfolios as
well as the net interest margin and operating net interest
margin:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2015
|
|
September 30,
2014
|
|
September 30,
2015
|
|
September 30,
2014
|
|
|
(dollars in
thousands)
|
Incremental accretion
income due to:
|
|
|
|
|
|
|
|
|
FDIC purchased credit
impaired loans
|
|
$
|
2,082
|
|
|
$
|
4,205
|
|
|
$
|
6,896
|
|
|
$
|
16,428
|
|
Other FDIC acquired
loans
|
|
34
|
|
|
175
|
|
|
166
|
|
|
474
|
|
Other acquired
loans
|
|
4,293
|
|
|
5,040
|
|
|
14,116
|
|
|
16,136
|
|
Incremental accretion
income
|
|
$
|
6,409
|
|
|
$
|
9,420
|
|
|
$
|
21,178
|
|
|
$
|
33,038
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
(tax equivalent)
|
|
4.37
|
%
|
|
4.85
|
%
|
|
4.39
|
%
|
|
4.86
|
%
|
Operating net
interest margin (tax equivalent) (1)
|
|
4.18
|
%
|
|
4.22
|
%
|
|
4.18
|
%
|
|
4.23
|
%
|
__________
(1) Operating
net interest margin (tax equivalent) is a non-GAAP financial
measure. See the section titled "Non-GAAP Financial Measures" on
the last pages of this earnings release for the reconciliation of
operating net interest margin (tax equivalent) to net interest
margin.
|
Asset Quality
At September 30, 2015, nonperforming assets to total assets
were 0.44% compared to 0.54% at June 30, 2015. Total
nonperforming assets decreased $7.9
million due to a $6.7 million
reduction in nonaccrual loans and a $1.2
million decline in other real estate owned due to sales
activity during the current quarter. Andy
McDonald, Columbia's
Executive Vice President and Chief Credit Officer, stated "One of
our goals coming out of the great recession was to reduce our level
of nonperforming assets below 50 basis points. We are pleased that
we have achieved this goal this past quarter as our NPA ratio
declined to 44 basis points."
The following table sets forth information regarding nonaccrual
loans and total nonperforming assets:
|
|
September 30,
2015
|
|
June 30,
2015
|
|
December 31,
2014
|
|
|
(in
thousands)
|
Nonaccrual
loans:
|
|
|
|
|
|
|
Commercial
business
|
|
$
|
10,150
|
|
|
$
|
13,539
|
|
|
$
|
16,799
|
|
Real
estate:
|
|
|
|
|
|
|
One-to-four family
residential
|
|
2,012
|
|
|
4,193
|
|
|
2,822
|
|
Commercial and
multifamily residential
|
|
4,317
|
|
|
3,809
|
|
|
7,847
|
|
Total real
estate
|
|
6,329
|
|
|
8,002
|
|
|
10,669
|
|
Real estate
construction:
|
|
|
|
|
|
|
One-to-four family
residential
|
|
1,472
|
|
|
1,937
|
|
|
465
|
|
Commercial and
multifamily residential
|
|
470
|
|
|
469
|
|
|
480
|
|
Total real estate
construction
|
|
1,942
|
|
|
2,406
|
|
|
945
|
|
Consumer
|
|
659
|
|
|
1,799
|
|
|
2,939
|
|
Total nonaccrual
loans
|
|
19,080
|
|
|
25,746
|
|
|
31,352
|
|
Other real estate
owned and other personal property owned
|
|
19,475
|
|
|
20,665
|
|
|
22,225
|
|
Total nonperforming
assets
|
|
$
|
38,555
|
|
|
$
|
46,411
|
|
|
$
|
53,577
|
|
The following table provides an analysis of the Company's
allowance for loan and lease losses ("ALLL"):
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014 (1)
|
|
2015
|
|
2014 (1)
|
|
|
(in
thousands)
|
Beginning
balance
|
|
$
|
69,257
|
|
|
$
|
69,295
|
|
|
$
|
69,569
|
|
|
$
|
72,454
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
Commercial
business
|
|
(2,570)
|
|
|
(1,348)
|
|
|
(6,082)
|
|
|
(3,298)
|
|
One-to-four family
residential real estate
|
|
—
|
|
|
—
|
|
|
(297)
|
|
|
(207)
|
|
Commercial and
multifamily residential real estate
|
|
(198)
|
|
|
(7)
|
|
|
(241)
|
|
|
(2,993)
|
|
Consumer
|
|
(311)
|
|
|
(620)
|
|
|
(1,521)
|
|
|
(2,256)
|
|
Purchased credit
impaired (1)
|
|
(3,198)
|
|
|
(3,236)
|
|
|
(10,174)
|
|
|
(11,350)
|
|
Total
charge-offs
|
|
(6,277)
|
|
|
(5,211)
|
|
|
(18,315)
|
|
|
(20,104)
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
Commercial
business
|
|
623
|
|
|
356
|
|
|
1,450
|
|
|
2,558
|
|
One-to-four family
residential real estate
|
|
261
|
|
|
63
|
|
|
288
|
|
|
103
|
|
Commercial and
multifamily residential real estate
|
|
417
|
|
|
140
|
|
|
3,698
|
|
|
716
|
|
One-to-four family
residential real estate construction
|
|
105
|
|
|
20
|
|
|
141
|
|
|
504
|
|
Commercial and
multifamily residential real estate construction
|
|
2
|
|
|
—
|
|
|
7
|
|
|
—
|
|
Consumer
|
|
297
|
|
|
340
|
|
|
707
|
|
|
931
|
|
Purchased credit
impaired (1)
|
|
1,533
|
|
|
1,888
|
|
|
5,262
|
|
|
5,690
|
|
Total
recoveries
|
|
3,238
|
|
|
2,807
|
|
|
11,553
|
|
|
10,502
|
|
Net
charge-offs
|
|
(3,039)
|
|
|
(2,404)
|
|
|
(6,762)
|
|
|
(9,602)
|
|
Provision for loan
and lease losses (1)
|
|
2,831
|
|
|
980
|
|
|
6,242
|
|
|
5,019
|
|
Ending
balance
|
|
$
|
69,049
|
|
|
$
|
67,871
|
|
|
$
|
69,049
|
|
|
$
|
67,871
|
|
__________
(1) Reclassified to conform to the current period's
presentation. The reclassification was limited to including
charge-off, recovery, and provision activity related to the
purchased credit impaired loan portfolio.
|
The allowance for loan losses to period end loans was 1.20% at
September 30, 2015 compared to 1.23% at June 30, 2015.
For the third quarter of 2015, Columbia recorded a net provision for loan and
lease losses of $2.8 million compared
to a net provision of $980 thousand
for the comparable quarter last year. The net provision for loan
and lease losses recorded during the current quarter was due to
organic loan growth, charge-off activity and higher loss rates in
the substandard category, partially offset by provision recapture
recorded for the purchased credit impaired portfolio.
Impact of FDIC Acquired Loan Accounting
While the significance of the FDIC Acquired Loan Accounting has
diminished over time, the following table illustrates the impact to
earnings associated with Columbia's FDIC acquired loan portfolios:
FDIC Acquired Loan
Accounting
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2015
|
|
September 30,
2014
|
|
September 30,
2015
|
|
September 30,
2014
|
|
|
(in
thousands)
|
Incremental accretion
income on FDIC purchased credit impaired loans
|
|
$
|
2,082
|
|
|
$
|
4,205
|
|
|
$
|
6,896
|
|
|
$
|
16,428
|
|
Incremental accretion
income on other FDIC acquired loans
|
|
34
|
|
|
175
|
|
|
166
|
|
|
474
|
|
Recapture (provision)
for losses on FDIC purchased credit impaired loans
|
|
519
|
|
|
520
|
|
|
(2,566)
|
|
|
(3,419)
|
|
Change in FDIC
loss-sharing asset
|
|
(1,635)
|
|
|
(4,816)
|
|
|
(2,979)
|
|
|
(14,685)
|
|
FDIC clawback
liability recovery (expense)
|
|
(174)
|
|
|
(201)
|
|
|
(167)
|
|
|
(302)
|
|
Pre-tax earnings
impact
|
|
$
|
826
|
|
|
$
|
(117)
|
|
|
$
|
1,350
|
|
|
$
|
(1,504)
|
|
The incremental accretion income on FDIC purchased credit
impaired loans represents the amount of income recorded above the
contractual rate stated in the individual loan notes. At
September 30, 2015, the accretable yield on purchased credit
impaired loans was $62.8 million.
Accretable yield is subject to change based upon expected future
loan cash flows, which are remeasured by Columbia on a quarterly basis.
The $1.6 million change in the
FDIC loss-sharing asset in the current quarter reduced noninterest
income and consisted primarily of $1.4
million in amortization expense. Additional details of the
components of the change in the FDIC loss-sharing asset are
provided in tabular format in the section titled "Noninterest
Income" in the following pages.
Organizational Update
Hadley Robbins, Columbia's Executive Vice President and Chief
Operating Officer commented, "As part of our continuing efforts to
grow noninterest income while increasing customer satisfaction, we
created a Banking Solutions division during the third
quarter. Comprised of deposit, payments and digital solutions
management functions, including the Cash Management and Merchant
Card Services departments and our Customer Care Centers, the
division is designed to help us maintain a relevant and
contemporary set of products for businesses and individuals."
Mr. Robbins continued, "We continually review our branch system
to ensure that we are running effectively and efficiently, while
providing the best possible customer service. We recently
celebrated a new building for our Mattawa branch in eastern Washington, delivering an enhanced level of
service and convenience to our customers in a very busy
location. We also announced the closure of two western
Washington branches planned for the fourth quarter this year."
Conference Call Information
Columbia's management will
discuss the third quarter 2015 results on a conference call
scheduled for Thursday, October 29,
2015 at 1:00 p.m. Pacific Daylight
Time (4:00 p.m. EDT).
Interested parties may listen to this discussion by calling
1-866-378-3802; Conference ID code #51083007.
A conference call replay will be available from approximately
4:00 p.m. PDT on October 29, 2015 through 9:00 p.m. PST on November
5, 2015. The conference call replay can be accessed by
dialing 1-855-859-2056 and entering Conference ID code
#51083007.
About Columbia
Headquartered in Tacoma,
Washington, Columbia Banking System, Inc. is the holding
company of Columbia Bank, a Washington
state-chartered full-service commercial bank, with over 150
branches throughout Washington,
Oregon and Idaho. For the
ninth consecutive year, the bank was named in 2015 as one
of Puget Sound Business Journal's "Washington's Best Workplaces."
Columbia ranked in the top 20 on
the 2015 Forbes list of best banks in the country,
as well as ranking the best in Washington and second in the Pacific Northwest
for the fourth year in a row.
More information about Columbia
can be found on its website at www.columbiabank.com.
Note Regarding Forward-Looking Statements
This news release includes forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which management believes are a benefit to shareholders. These
forward looking statements describe Columbia's management's expectations regarding
future events and developments such as future operating results,
growth in loans and deposits, continued success of Columbia's style of banking and the strength
of the local economy. The words "will," "believe," "expect,"
"intend," "should," and "anticipate" and words of similar
construction are intended in part to help identify forward looking
statements. Future events are difficult to predict, and the
expectations described above are necessarily subject to risk and
uncertainty that may cause actual results to differ materially and
adversely. In addition to discussions about risks and uncertainties
set forth from time to time in Columbia's filings with the Securities and
Exchange Commission, available at the SEC's website at
www.sec.gov and the Company's website at www.columbiabank.com,
including the "Risk Factors," "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of our annual reports on Form 10-K and
quarterly reports on Form 10-Q, factors that may cause actual
results to differ materially from those contemplated by such
forward-looking statements include, among others, the
following: (1) local, national and international economic
conditions may be less favorable than expected or have a more
direct and pronounced effect on Columbia than expected and adversely affect
Columbia's ability to continue its
internal growth at historical rates and maintain the quality of its
earning assets; (2) changes in interest rates may reduce interest
margins more than expected and negatively affect funding sources;
(3) projected business increases following strategic expansion or
opening or acquiring new branches may be lower than expected; (4)
costs or difficulties related to the integration of acquisitions
may be greater than expected; (5) competitive pressure among
financial institutions may increase significantly; and (6)
legislation or regulatory requirements or changes may adversely
affect the businesses in which Columbia is engaged. We believe the
expectations reflected in our forward-looking statements are
reasonable, based on information available to us on the date
hereof. However, given the described uncertainties and risks, we
cannot guarantee our future performance or results of operations
and you should not place undue reliance on these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The factors noted above and the risks
and uncertainties described in our SEC filings should be considered
when reading any forward-looking statements in this release.
Contacts:
|
Melanie J.
Dressel,
|
|
President
and
|
|
Chief Executive
Officer
|
|
(253)
305-1911
|
|
|
|
Clint E.
Stein,
|
|
Executive Vice
President
|
|
and Chief Financial
Officer
|
|
(253)
593-8304
|
FINANCIAL
STATISTICS
|
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
Three Months
Ended
|
|
Nine Months
Ended
|
Unaudited
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Earnings
|
|
(dollars in
thousands except per share amounts)
|
Net interest
income
|
|
$
|
81,694
|
|
|
$
|
76,220
|
|
|
$
|
243,068
|
|
|
$
|
225,284
|
|
Provision for loan
and lease losses
|
|
$
|
2,831
|
|
|
$
|
980
|
|
|
$
|
6,242
|
|
|
$
|
5,019
|
|
Noninterest
income
|
|
$
|
22,499
|
|
|
$
|
15,930
|
|
|
$
|
66,728
|
|
|
$
|
44,565
|
|
Noninterest
expense
|
|
$
|
64,067
|
|
|
$
|
59,982
|
|
|
$
|
199,272
|
|
|
$
|
175,132
|
|
Acquisition-related
expense (included in noninterest expense)
|
|
$
|
428
|
|
|
$
|
3,238
|
|
|
$
|
9,045
|
|
|
$
|
4,876
|
|
Net income
|
|
$
|
25,780
|
|
|
$
|
21,583
|
|
|
$
|
72,087
|
|
|
$
|
62,654
|
|
Per Common
Share
|
|
|
|
|
|
|
|
|
Earnings
(basic)
|
|
$
|
0.45
|
|
|
$
|
0.41
|
|
|
$
|
1.25
|
|
|
$
|
1.20
|
|
Earnings
(diluted)
|
|
$
|
0.45
|
|
|
$
|
0.41
|
|
|
$
|
1.25
|
|
|
$
|
1.18
|
|
Book value
|
|
$
|
21.69
|
|
|
$
|
20.78
|
|
|
$
|
21.69
|
|
|
$
|
20.78
|
|
Averages
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,672,692
|
|
|
$
|
7,337,306
|
|
|
$
|
8,570,825
|
|
|
$
|
7,237,459
|
|
Interest-earning
assets
|
|
$
|
7,711,531
|
|
|
$
|
6,451,660
|
|
|
$
|
7,600,954
|
|
|
$
|
6,345,909
|
|
Loans
|
|
$
|
5,712,614
|
|
|
$
|
4,770,443
|
|
|
$
|
5,557,771
|
|
|
$
|
4,652,157
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
1,945,174
|
|
|
$
|
1,585,996
|
|
|
$
|
1,996,527
|
|
|
$
|
1,637,766
|
|
Deposits
|
|
$
|
7,233,863
|
|
|
$
|
6,110,809
|
|
|
$
|
7,047,818
|
|
|
$
|
5,994,608
|
|
Interest-bearing
deposits
|
|
$
|
3,910,695
|
|
|
$
|
3,847,730
|
|
|
$
|
3,939,525
|
|
|
$
|
3,809,546
|
|
Interest-bearing
liabilities
|
|
$
|
4,007,198
|
|
|
$
|
3,889,233
|
|
|
$
|
4,119,815
|
|
|
$
|
3,886,180
|
|
Noninterest-bearing
deposits
|
|
$
|
3,323,168
|
|
|
$
|
2,263,079
|
|
|
$
|
3,108,293
|
|
|
$
|
2,185,062
|
|
Shareholders'
equity
|
|
$
|
1,239,830
|
|
|
$
|
1,099,512
|
|
|
$
|
1,242,853
|
|
|
$
|
1,084,049
|
|
Financial
Ratios
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.19
|
%
|
|
1.18
|
%
|
|
1.12
|
%
|
|
1.15
|
%
|
Return on average
common equity
|
|
8.32
|
%
|
|
7.86
|
%
|
|
7.74
|
%
|
|
7.71
|
%
|
Average equity to
average assets
|
|
14.30
|
%
|
|
14.99
|
%
|
|
14.50
|
%
|
|
14.98
|
%
|
Net interest margin
(tax equivalent)
|
|
4.37
|
%
|
|
4.85
|
%
|
|
4.39
|
%
|
|
4.86
|
%
|
Efficiency ratio (tax
equivalent) (1)
|
|
59.69
|
%
|
|
63.33
|
%
|
|
62.51
|
%
|
|
63.16
|
%
|
Operating efficiency
ratio (tax equivalent) (2)
|
|
58.85
|
%
|
|
63.81
|
%
|
|
60.86
|
%
|
|
64.26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
Period
end
|
|
2015
|
|
2014
|
|
2014
|
|
|
Total
assets
|
|
$
|
8,755,984
|
|
|
$
|
7,466,081
|
|
|
$
|
8,578,846
|
|
|
|
Loans, net of
unearned income
|
|
$
|
5,746,511
|
|
|
$
|
4,823,022
|
|
|
$
|
5,445,378
|
|
|
|
Allowance for loan
and lease losses
|
|
$
|
69,049
|
|
|
$
|
67,871
|
|
|
$
|
69,569
|
|
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,037,666
|
|
|
$
|
1,643,003
|
|
|
$
|
2,131,622
|
|
|
|
Deposits
|
|
$
|
7,314,805
|
|
|
$
|
6,244,401
|
|
|
$
|
6,924,722
|
|
|
|
Core
deposits
|
|
$
|
6,986,206
|
|
|
$
|
5,990,118
|
|
|
$
|
6,619,944
|
|
|
|
Shareholders'
equity
|
|
$
|
1,254,136
|
|
|
$
|
1,096,211
|
|
|
$
|
1,228,175
|
|
|
|
Nonperforming
assets
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
19,080
|
|
|
$
|
27,998
|
|
|
$
|
31,352
|
|
|
|
Other real estate
owned ("OREO") and other personal property owned
("OPPO")
|
|
19,475
|
|
|
21,941
|
|
|
22,225
|
|
|
|
Total nonperforming
assets
|
|
$
|
38,555
|
|
|
$
|
49,939
|
|
|
$
|
53,577
|
|
|
|
Nonperforming loans
to period-end loans
|
|
0.33
|
%
|
|
0.58
|
%
|
|
0.58
|
%
|
|
|
Nonperforming assets
to period-end assets
|
|
0.44
|
%
|
|
0.67
|
%
|
|
0.62
|
%
|
|
|
Allowance for loan
and lease losses to period-end loans
|
|
1.20
|
%
|
|
1.41
|
%
|
|
1.28
|
%
|
|
|
Net loan
charge-offs
|
|
$
|
6,762
|
|
(3)
|
$
|
9,602
|
|
(4)
|
$
|
9,612
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
(1) Noninterest expense divided by the sum of net
interest income on a tax equivalent basis and noninterest income on
a tax equivalent basis.
|
(2) The
operating efficiency ratio (tax equivalent) is a non-GAAP financial
measure. See section titled "Non-GAAP Financial Measures" on the
last pages of this earnings release for the reconciliation of the
operating efficiency ratio (tax equivalent) to the efficiency ratio
(tax equivalent).
|
(3) For the
nine months ended September 30, 2015.
|
(4) For the
nine months ended September 30, 2014.
|
(5) For the
twelve months ended December 31, 2014.
|
|
|
|
|
FINANCIAL
STATISTICS
|
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
|
|
|
|
Unaudited
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
Loan Portfolio
Composition
|
|
(dollars in
thousands)
|
Commercial
business
|
|
$
|
2,354,731
|
|
|
41.0
|
%
|
|
$
|
2,119,565
|
|
|
38.9
|
%
|
Real
estate:
|
|
|
|
|
|
|
|
|
One-to-four family
residential
|
|
177,108
|
|
|
3.1
|
%
|
|
175,571
|
|
|
3.2
|
%
|
Commercial and
multifamily residential
|
|
2,449,847
|
|
|
42.6
|
%
|
|
2,363,541
|
|
|
43.5
|
%
|
Total real
estate
|
|
2,626,955
|
|
|
45.7
|
%
|
|
2,539,112
|
|
|
46.7
|
%
|
Real estate
construction:
|
|
|
|
|
|
|
|
|
One-to-four family
residential
|
|
136,783
|
|
|
2.4
|
%
|
|
116,866
|
|
|
2.1
|
%
|
Commercial and
multifamily residential
|
|
134,097
|
|
|
2.3
|
%
|
|
134,443
|
|
|
2.5
|
%
|
Total real estate
construction
|
|
270,880
|
|
|
4.7
|
%
|
|
251,309
|
|
|
4.6
|
%
|
Consumer
|
|
348,315
|
|
|
6.1
|
%
|
|
364,182
|
|
|
6.7
|
%
|
Purchased credit
impaired
|
|
191,066
|
|
|
3.3
|
%
|
|
230,584
|
|
|
4.2
|
%
|
Subtotal
loans
|
|
5,791,947
|
|
|
100.8
|
%
|
|
5,504,752
|
|
|
101.1
|
%
|
Less: Net
unearned income
|
|
(45,436)
|
|
|
(0.8)%
|
|
|
(59,374)
|
|
|
(1.1)%
|
|
Loans, net of
unearned income
|
|
5,746,511
|
|
|
100.0
|
%
|
|
5,445,378
|
|
|
100.0
|
%
|
Less: Allowance
for loan and lease losses
|
|
(69,049)
|
|
|
|
|
(69,569)
|
|
|
|
Total loans,
net
|
|
5,677,462
|
|
|
|
|
5,375,809
|
|
|
|
Loans held for
sale
|
|
$
|
6,637
|
|
|
|
|
$
|
1,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
Deposit
Composition
|
|
(dollars in
thousands)
|
Core
deposits:
|
|
|
|
|
|
|
|
|
Demand and other
non-interest bearing
|
|
$
|
3,386,968
|
|
|
46.3
|
%
|
|
$
|
2,651,373
|
|
|
38.3
|
%
|
Interest bearing
demand
|
|
911,686
|
|
|
12.5
|
%
|
|
1,304,258
|
|
|
18.8
|
%
|
Money
market
|
|
1,776,087
|
|
|
24.3
|
%
|
|
1,760,331
|
|
|
25.4
|
%
|
Savings
|
|
651,695
|
|
|
8.9
|
%
|
|
615,721
|
|
|
8.9
|
%
|
Certificates of
deposit less than $100,000
|
|
259,770
|
|
|
3.6
|
%
|
|
288,261
|
|
|
4.2
|
%
|
Total core
deposits
|
|
6,986,206
|
|
|
95.6
|
%
|
|
6,619,944
|
|
|
95.6
|
%
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit greater than $100,000
|
|
184,047
|
|
|
2.4
|
%
|
|
202,014
|
|
|
2.9
|
%
|
Certificates of
deposit insured by CDARS®
|
|
26,975
|
|
|
0.4
|
%
|
|
18,429
|
|
|
0.3
|
%
|
Brokered money market
accounts
|
|
117,196
|
|
|
1.6
|
%
|
|
83,402
|
|
|
1.2
|
%
|
Subtotal
|
|
7,314,424
|
|
|
100.0
|
%
|
|
6,923,789
|
|
|
100.0
|
%
|
Premium resulting
from acquisition date fair value adjustment
|
|
381
|
|
|
|
|
933
|
|
|
|
Total
deposits
|
|
$
|
7,314,805
|
|
|
|
|
$
|
6,924,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUARTERLY
FINANCIAL STATISTICS
|
|
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
Three Months
Ended
|
Unaudited
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
|
2015
|
|
2015
|
|
2015
|
|
2014
|
|
2014
|
|
|
(dollars in
thousands except per share)
|
Earnings
|
|
|
Net interest
income
|
|
$
|
81,694
|
|
|
$
|
81,010
|
|
|
$
|
80,364
|
|
|
$
|
78,764
|
|
|
$
|
76,220
|
|
Provision for loan
and lease losses
|
|
$
|
2,831
|
|
|
$
|
2,202
|
|
|
$
|
1,209
|
|
|
$
|
1,708
|
|
|
$
|
980
|
|
Noninterest
income
|
|
$
|
22,499
|
|
|
$
|
21,462
|
|
|
$
|
22,767
|
|
|
$
|
15,185
|
|
|
$
|
15,930
|
|
Noninterest
expense
|
|
$
|
64,067
|
|
|
$
|
68,471
|
|
|
$
|
66,734
|
|
|
$
|
64,154
|
|
|
$
|
59,982
|
|
Acquisition-related
expense (included in noninterest expense)
|
|
$
|
428
|
|
|
$
|
5,643
|
|
|
$
|
2,974
|
|
|
$
|
4,556
|
|
|
$
|
3,238
|
|
Net income
|
|
$
|
25,780
|
|
|
$
|
21,946
|
|
|
$
|
24,361
|
|
|
$
|
18,920
|
|
|
$
|
21,583
|
|
Per Common
Share
|
|
|
|
|
|
|
|
|
|
|
Earnings
(basic)
|
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
0.42
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
Earnings
(diluted)
|
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
0.42
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
Book value
|
|
$
|
21.69
|
|
|
$
|
21.38
|
|
|
$
|
21.53
|
|
|
$
|
21.34
|
|
|
$
|
20.78
|
|
Averages
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,672,692
|
|
|
$
|
8,532,173
|
|
|
$
|
8,505,776
|
|
|
$
|
8,152,463
|
|
|
$
|
7,337,306
|
|
Interest-earning
assets
|
|
$
|
7,711,531
|
|
|
$
|
7,560,288
|
|
|
$
|
7,529,040
|
|
|
$
|
7,199,443
|
|
|
$
|
6,451,660
|
|
Loans
|
|
$
|
5,712,614
|
|
|
$
|
5,542,489
|
|
|
$
|
5,414,942
|
|
|
$
|
5,168,761
|
|
|
$
|
4,770,443
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
1,945,174
|
|
|
$
|
1,976,959
|
|
|
$
|
2,068,806
|
|
|
$
|
1,918,690
|
|
|
$
|
1,585,996
|
|
Deposits
|
|
$
|
7,233,863
|
|
|
$
|
6,978,472
|
|
|
$
|
6,927,756
|
|
|
$
|
6,759,259
|
|
|
$
|
6,110,809
|
|
Interest-bearing
deposits
|
|
$
|
3,910,695
|
|
|
$
|
3,753,101
|
|
|
$
|
4,157,491
|
|
|
$
|
4,174,459
|
|
|
$
|
3,847,730
|
|
Interest-bearing
liabilities
|
|
$
|
4,007,198
|
|
|
$
|
3,961,013
|
|
|
$
|
4,395,502
|
|
|
$
|
4,282,273
|
|
|
$
|
3,889,233
|
|
Noninterest-bearing
deposits
|
|
$
|
3,323,168
|
|
|
$
|
3,225,371
|
|
|
$
|
2,770,265
|
|
|
$
|
2,584,800
|
|
|
$
|
2,263,079
|
|
Shareholders'
equity
|
|
$
|
1,239,830
|
|
|
$
|
1,247,887
|
|
|
$
|
1,240,853
|
|
|
$
|
1,185,346
|
|
|
$
|
1,099,512
|
|
Financial
Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.19
|
%
|
|
1.03
|
%
|
|
1.15
|
%
|
|
0.93
|
%
|
|
1.18
|
%
|
Return on average
common equity
|
|
8.32
|
%
|
|
7.04
|
%
|
|
7.86
|
%
|
|
6.39
|
%
|
|
7.86
|
%
|
Average equity to
average assets
|
|
14.30
|
%
|
|
14.63
|
%
|
|
14.59
|
%
|
|
14.54
|
%
|
|
14.99
|
%
|
Net interest margin
(tax equivalent)
|
|
4.37
|
%
|
|
4.41
|
%
|
|
4.39
|
%
|
|
4.50
|
%
|
|
4.85
|
%
|
Period
end
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,755,984
|
|
|
$
|
8,518,019
|
|
|
$
|
8,552,902
|
|
|
$
|
8,578,846
|
|
|
$
|
7,466,081
|
|
Loans, net of
unearned income
|
|
$
|
5,746,511
|
|
|
$
|
5,611,897
|
|
|
$
|
5,450,895
|
|
|
$
|
5,445,378
|
|
|
$
|
4,823,022
|
|
Allowance for loan
and lease losses
|
|
$
|
69,049
|
|
|
$
|
69,257
|
|
|
$
|
70,234
|
|
|
$
|
69,569
|
|
|
$
|
67,871
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,037,666
|
|
|
$
|
1,926,248
|
|
|
$
|
2,040,163
|
|
|
$
|
2,131,622
|
|
|
$
|
1,643,003
|
|
Deposits
|
|
$
|
7,314,805
|
|
|
$
|
7,044,373
|
|
|
$
|
7,074,965
|
|
|
$
|
6,924,722
|
|
|
$
|
6,244,401
|
|
Core
deposits
|
|
$
|
6,986,206
|
|
|
$
|
6,737,969
|
|
|
$
|
6,771,755
|
|
|
$
|
6,619,944
|
|
|
$
|
5,990,118
|
|
Shareholders'
equity
|
|
$
|
1,254,136
|
|
|
$
|
1,236,214
|
|
|
$
|
1,244,443
|
|
|
$
|
1,228,175
|
|
|
$
|
1,096,211
|
|
Nonperforming,
assets
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
19,080
|
|
|
$
|
25,746
|
|
|
$
|
31,828
|
|
|
$
|
31,352
|
|
|
$
|
27,998
|
|
OREO and
OPPO
|
|
19,475
|
|
|
20,665
|
|
|
23,347
|
|
|
22,225
|
|
|
21,941
|
|
Total nonperforming
assets
|
|
$
|
38,555
|
|
|
$
|
46,411
|
|
|
$
|
55,175
|
|
|
$
|
53,577
|
|
|
$
|
49,939
|
|
Nonperforming loans
to period-end loans
|
|
0.33
|
%
|
|
0.46
|
%
|
|
0.58
|
%
|
|
0.58
|
%
|
|
0.58
|
%
|
Nonperforming assets
to period-end assets
|
|
0.44
|
%
|
|
0.54
|
%
|
|
0.65
|
%
|
|
0.62
|
%
|
|
0.67
|
%
|
Allowance for loan
and lease losses to period-end loans
|
|
1.20
|
%
|
|
1.23
|
%
|
|
1.29
|
%
|
|
1.28
|
%
|
|
1.41
|
%
|
Net loan
charge-offs
|
|
$
|
3,039
|
|
|
$
|
3,179
|
|
|
$
|
544
|
|
|
$
|
10
|
|
|
$
|
2,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
Three Months
Ended
|
|
Nine Months
Ended
|
Unaudited
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(in thousands
except per share)
|
Interest
Income
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
72,242
|
|
|
$
|
65,903
|
|
|
$
|
214,808
|
|
|
$
|
198,448
|
|
Taxable
securities
|
|
7,472
|
|
|
8,545
|
|
|
22,258
|
|
|
21,679
|
|
Tax-exempt
securities
|
|
2,920
|
|
|
2,624
|
|
|
8,972
|
|
|
7,913
|
|
Deposits in
banks
|
|
31
|
|
|
61
|
|
|
84
|
|
|
105
|
|
Total interest
income
|
|
82,665
|
|
|
77,133
|
|
|
246,122
|
|
|
228,145
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
Deposits
|
|
756
|
|
|
713
|
|
|
2,244
|
|
|
2,194
|
|
Federal Home Loan
Bank advances
|
|
78
|
|
|
80
|
|
|
391
|
|
|
309
|
|
Other
borrowings
|
|
137
|
|
|
120
|
|
|
419
|
|
|
358
|
|
Total interest
expense
|
|
971
|
|
|
913
|
|
|
3,054
|
|
|
2,861
|
|
Net Interest
Income
|
|
81,694
|
|
|
76,220
|
|
|
243,068
|
|
|
225,284
|
|
Provision for loan
and lease losses
|
|
2,831
|
|
|
980
|
|
|
6,242
|
|
|
5,019
|
|
Net interest income
after provision for loan and lease losses
|
|
78,863
|
|
|
75,240
|
|
|
236,826
|
|
|
220,265
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
Service charges and
other fees
|
|
15,893
|
|
|
14,254
|
|
|
46,636
|
|
|
40,980
|
|
Merchant services
fees
|
|
2,422
|
|
|
2,104
|
|
|
6,802
|
|
|
6,014
|
|
Investment securities
gains, net
|
|
236
|
|
|
33
|
|
|
1,300
|
|
|
552
|
|
Bank owned life
insurance
|
|
1,086
|
|
|
956
|
|
|
3,370
|
|
|
2,897
|
|
Change in FDIC
loss-sharing asset
|
|
(1,635)
|
|
|
(4,816)
|
|
|
(2,979)
|
|
|
(14,685)
|
|
Other
|
|
4,497
|
|
|
3,399
|
|
|
11,599
|
|
|
8,807
|
|
Total noninterest
income
|
|
22,499
|
|
|
15,930
|
|
|
66,728
|
|
|
44,565
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
35,175
|
|
|
32,559
|
|
|
112,721
|
|
|
94,961
|
|
Occupancy
|
|
8,101
|
|
|
7,445
|
|
|
24,781
|
|
|
24,276
|
|
Merchant
processing
|
|
1,090
|
|
|
1,080
|
|
|
3,146
|
|
|
3,058
|
|
Advertising and
promotion
|
|
1,354
|
|
|
1,027
|
|
|
3,480
|
|
|
2,746
|
|
Data processing and
communications
|
|
3,796
|
|
|
4,269
|
|
|
13,022
|
|
|
11,469
|
|
Legal and
professional fees
|
|
2,173
|
|
|
2,905
|
|
|
7,527
|
|
|
7,377
|
|
Taxes, licenses and
fees
|
|
1,344
|
|
|
1,156
|
|
|
4,003
|
|
|
3,387
|
|
Regulatory
premiums
|
|
1,084
|
|
|
1,195
|
|
|
3,626
|
|
|
3,444
|
|
Net cost (benefit) of
operation of other real estate owned
|
|
240
|
|
|
(1,256)
|
|
|
(1,569)
|
|
|
(1,207)
|
|
Amortization of
intangibles
|
|
1,695
|
|
|
1,456
|
|
|
5,230
|
|
|
4,516
|
|
Other
|
|
8,015
|
|
|
8,146
|
|
|
23,305
|
|
|
21,105
|
|
Total noninterest
expense
|
|
64,067
|
|
|
59,982
|
|
|
199,272
|
|
|
175,132
|
|
Income before income
taxes
|
|
37,295
|
|
|
31,188
|
|
|
104,282
|
|
|
89,698
|
|
Provision for income
taxes
|
|
11,515
|
|
|
9,605
|
|
|
32,195
|
|
|
27,044
|
|
Net
Income
|
|
$
|
25,780
|
|
|
$
|
21,583
|
|
|
$
|
72,087
|
|
|
$
|
62,654
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.45
|
|
|
$
|
0.41
|
|
|
$
|
1.25
|
|
|
$
|
1.20
|
|
Diluted
|
|
$
|
0.45
|
|
|
$
|
0.41
|
|
|
$
|
1.25
|
|
|
$
|
1.18
|
|
Dividends paid per
common share
|
|
$
|
0.34
|
|
|
$
|
0.28
|
|
|
$
|
0.98
|
|
|
$
|
0.64
|
|
Weighted average
number of common shares outstanding
|
|
57,051
|
|
|
52,112
|
|
|
57,007
|
|
|
51,772
|
|
Weighted average
number of diluted common shares outstanding
|
|
57,064
|
|
|
52,516
|
|
|
57,021
|
|
|
52,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
|
Unaudited
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
(in
thousands)
|
ASSETS
|
|
|
Cash and due from
banks
|
|
$
|
149,610
|
|
|
$
|
171,221
|
|
Interest-earning
deposits with banks
|
|
22,578
|
|
|
16,949
|
|
Total cash and cash
equivalents
|
|
172,188
|
|
|
188,170
|
|
Securities available
for sale at fair value (amortized cost of $2,004,728 and
$2,087,069, respectively)
|
|
2,027,424
|
|
|
2,098,257
|
|
Federal Home Loan
Bank stock at cost
|
|
10,242
|
|
|
33,365
|
|
Loans held for
sale
|
|
6,637
|
|
|
1,116
|
|
Loans, net of
unearned income of ($45,436) and ($59,374), respectively
|
|
5,746,511
|
|
|
5,445,378
|
|
Less: allowance for
loan and lease losses
|
|
69,049
|
|
|
69,569
|
|
Loans, net
|
|
5,677,462
|
|
|
5,375,809
|
|
FDIC loss-sharing
asset
|
|
8,146
|
|
|
15,174
|
|
Interest
receivable
|
|
30,486
|
|
|
27,802
|
|
Premises and
equipment, net
|
|
168,495
|
|
|
172,090
|
|
Other real estate
owned
|
|
19,456
|
|
|
22,190
|
|
Goodwill
|
|
382,762
|
|
|
382,537
|
|
Other intangible
assets, net
|
|
25,229
|
|
|
30,459
|
|
Other
assets
|
|
227,457
|
|
|
231,877
|
|
Total
assets
|
|
$
|
8,755,984
|
|
|
$
|
8,578,846
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
|
|
$
|
3,386,968
|
|
|
$
|
2,651,373
|
|
Interest-bearing
|
|
3,927,837
|
|
|
4,273,349
|
|
Total
deposits
|
|
7,314,805
|
|
|
6,924,722
|
|
Federal Home Loan
Bank advances
|
|
6,540
|
|
|
216,568
|
|
Securities sold under
agreements to repurchase
|
|
73,182
|
|
|
105,080
|
|
Other
borrowings
|
|
|
|
|
—
|
|
|
8,248
|
|
Other
liabilities
|
|
107,321
|
|
|
96,053
|
|
Total
liabilities
|
|
7,501,848
|
|
|
7,350,671
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
Preferred stock (no
par value)
|
(in
thousands)
|
|
|
|
|
Authorized
shares
|
2,000
|
|
|
2,000
|
|
|
|
|
|
Issued and
outstanding
|
9
|
|
|
9
|
|
|
2,217
|
|
|
2,217
|
|
Common stock (no par
value)
|
|
|
|
|
|
|
|
Authorized
shares
|
115,000
|
|
|
63,033
|
|
|
|
|
|
Issued and
outstanding
|
57,729
|
|
|
57,437
|
|
|
989,088
|
|
|
985,839
|
|
Retained
earnings
|
|
250,005
|
|
|
234,498
|
|
Accumulated other
comprehensive income
|
|
12,826
|
|
|
5,621
|
|
Total shareholders'
equity
|
|
1,254,136
|
|
|
1,228,175
|
|
Total liabilities and
shareholders' equity
|
|
$
|
8,755,984
|
|
|
$
|
8,578,846
|
|
|
|
AVERAGE
BALANCES AND RATES
|
|
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Three Months Ended
September 30,
|
|
|
2015
|
|
2014 (1)
|
|
|
Average Balances
|
|
Interest
Earned / Paid
|
|
Average Rate
|
|
Average Balances
|
|
Interest
Earned / Paid
|
|
Average Rate
|
|
|
(dollars in
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net
(1)(2)(4)
|
|
$
|
5,712,614
|
|
|
$
|
73,231
|
|
|
5.13
|
%
|
|
$
|
4,770,443
|
|
|
$
|
66,421
|
|
|
5.57
|
%
|
Taxable securities
(3)
|
|
1,498,211
|
|
|
7,472
|
|
|
1.99
|
%
|
|
1,224,608
|
|
|
8,545
|
|
|
2.79
|
%
|
Tax exempt securities
(4)
|
|
446,963
|
|
|
4,491
|
|
|
4.02
|
%
|
|
361,388
|
|
|
4,118
|
|
|
4.56
|
%
|
Interest-earning
deposits with banks
|
|
53,743
|
|
|
31
|
|
|
0.23
|
%
|
|
95,221
|
|
|
61
|
|
|
0.26
|
%
|
Total
interest-earning assets
|
|
7,711,531
|
|
|
$
|
85,225
|
|
|
4.42
|
%
|
|
6,451,660
|
|
|
$
|
79,145
|
|
|
4.91
|
%
|
Other earning
assets
|
|
149,895
|
|
|
|
|
|
|
131,887
|
|
|
|
|
|
Noninterest-earning
assets
|
|
811,266
|
|
|
|
|
|
|
753,759
|
|
|
|
|
|
Total
assets
|
|
$
|
8,672,692
|
|
|
|
|
|
|
$
|
7,337,306
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
Certificates of
deposit
|
|
$
|
480,132
|
|
|
$
|
213
|
|
|
0.18
|
%
|
|
$
|
460,985
|
|
|
$
|
288
|
|
|
0.25
|
%
|
Savings
accounts
|
|
643,672
|
|
|
17
|
|
|
0.01
|
%
|
|
539,982
|
|
|
15
|
|
|
0.01
|
%
|
Interest-bearing
demand
|
|
916,388
|
|
|
158
|
|
|
0.07
|
%
|
|
1,201,154
|
|
|
117
|
|
|
0.04
|
%
|
Money market
accounts
|
|
1,870,503
|
|
|
368
|
|
|
0.08
|
%
|
|
1,645,609
|
|
|
293
|
|
|
0.07
|
%
|
Total
interest-bearing deposits
|
|
3,910,695
|
|
|
756
|
|
|
0.08
|
%
|
|
3,847,730
|
|
|
713
|
|
|
0.07
|
%
|
Federal Home Loan
Bank advances
|
|
13,968
|
|
|
78
|
|
|
2.23
|
%
|
|
16,503
|
|
|
80
|
|
|
1.94
|
%
|
Other
borrowings
|
|
82,535
|
|
|
137
|
|
|
0.66
|
%
|
|
25,000
|
|
|
120
|
|
|
1.92
|
%
|
Total
interest-bearing liabilities
|
|
4,007,198
|
|
|
$
|
971
|
|
|
0.10
|
%
|
|
3,889,233
|
|
|
$
|
913
|
|
|
0.09
|
%
|
Noninterest-bearing
deposits
|
|
3,323,168
|
|
|
|
|
|
|
2,263,079
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
102,496
|
|
|
|
|
|
|
85,482
|
|
|
|
|
|
Shareholders'
equity
|
|
1,239,830
|
|
|
|
|
|
|
1,099,512
|
|
|
|
|
|
Total
liabilities & shareholders' equity
|
|
$
|
8,672,692
|
|
|
|
|
|
|
$
|
7,337,306
|
|
|
|
|
|
Net interest income
(tax equivalent)
|
|
|
|
|
|
$
|
84,254
|
|
|
|
|
|
|
$
|
78,232
|
|
|
|
Net interest margin
(tax equivalent)
|
|
|
|
|
|
|
|
|
|
4.37
|
%
|
|
|
|
|
|
4.85
|
%
|
|
|
(1)
|
Adjusted to conform
to the current period presentation. The adjustment was limited to
including amounts historically disclosed as "Covered loans" in
"Loans, net."
|
|
|
(2)
|
Nonaccrual loans have
been included in the tables as loans carrying a zero yield.
Amortized net deferred loan fees and net unearned discounts on
certain acquired loans were included in the interest income
calculations. The amortization of net deferred loan fees was $1.2
million for both three month periods ended September 30, 2015 and
2014. The incremental accretion on acquired loans was $6.4 million
and $9.4 million for the three months ended September 30, 2015 and
2014, respectively.
|
|
|
(3)
|
During the three
months ended September 30, 2014, the Company recorded a $2.6
million reversal of premium amortization, which increased interest
income on taxable securities.
|
|
|
(4)
|
Tax-exempt income is
calculated on a tax equivalent basis. The tax equivalent yield
adjustment to interest earned on loans was $989 thousand and $518
thousand for the three months ended September 30, 2015 and 2014,
respectively. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $1.6 million and $1.5 million
for the three months ended September 30, 2015 and 2014,
respectively.
|
AVERAGE
BALANCES AND RATES
|
|
|
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014 (1)
|
|
|
Average Balances
|
|
Interest Earned / Paid
|
|
Average Rate
|
|
Average Balances
|
|
Interest Earned / Paid
|
|
Average Rate
|
|
|
(dollars in
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net
(1)(2)(4)
|
|
$
|
5,557,771
|
|
|
$
|
217,128
|
|
|
5.21
|
%
|
|
$
|
4,652,157
|
|
|
$
|
199,747
|
|
|
5.72
|
%
|
Taxable securities
(3)
|
|
1,541,018
|
|
|
22,258
|
|
|
1.93
|
%
|
|
1,278,295
|
|
|
21,679
|
|
|
2.26
|
%
|
Tax exempt securities
(4)
|
|
455,509
|
|
|
13,802
|
|
|
4.04
|
%
|
|
359,471
|
|
|
12,419
|
|
|
4.61
|
%
|
Interest-earning
deposits with banks
|
|
46,656
|
|
|
84
|
|
|
0.24
|
%
|
|
55,986
|
|
|
105
|
|
|
0.25
|
%
|
Total
interest-earning assets
|
|
7,600,954
|
|
|
$
|
253,272
|
|
|
4.44
|
%
|
|
6,345,909
|
|
|
$
|
233,950
|
|
|
4.92
|
%
|
Other earning
assets
|
|
148,189
|
|
|
|
|
|
|
129,819
|
|
|
|
|
|
Noninterest-earning
assets
|
|
821,682
|
|
|
|
|
|
|
761,731
|
|
|
|
|
|
Total
assets
|
|
$
|
8,570,825
|
|
|
|
|
|
|
$
|
7,237,459
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
Certificates of
deposit
|
|
$
|
490,720
|
|
|
$
|
689
|
|
|
0.19
|
%
|
|
$
|
481,370
|
|
|
$
|
975
|
|
|
0.27
|
%
|
Savings
accounts
|
|
631,979
|
|
|
53
|
|
|
0.01
|
%
|
|
527,183
|
|
|
42
|
|
|
0.01
|
%
|
Interest-bearing
demand
|
|
1,003,544
|
|
|
451
|
|
|
0.06
|
%
|
|
1,185,831
|
|
|
340
|
|
|
0.04
|
%
|
Money market
accounts
|
|
1,813,282
|
|
|
1,051
|
|
|
0.08
|
%
|
|
1,615,162
|
|
|
837
|
|
|
0.07
|
%
|
Total
interest-bearing deposits
|
|
3,939,525
|
|
|
2,244
|
|
|
0.08
|
%
|
|
3,809,546
|
|
|
2,194
|
|
|
0.08
|
%
|
Federal Home Loan
Bank advances
|
|
88,121
|
|
|
391
|
|
|
0.59
|
%
|
|
51,634
|
|
|
309
|
|
|
0.80
|
%
|
Other
borrowings
|
|
92,169
|
|
|
419
|
|
|
0.61
|
%
|
|
25,000
|
|
|
358
|
|
|
1.91
|
%
|
Total
interest-bearing liabilities
|
|
4,119,815
|
|
|
$
|
3,054
|
|
|
0.10
|
%
|
|
3,886,180
|
|
|
$
|
2,861
|
|
|
0.10
|
%
|
Noninterest-bearing
deposits
|
|
3,108,293
|
|
|
|
|
|
|
2,185,062
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
99,864
|
|
|
|
|
|
|
82,168
|
|
|
|
|
|
Shareholders'
equity
|
|
1,242,853
|
|
|
|
|
|
|
1,084,049
|
|
|
|
|
|
Total
liabilities & shareholders' equity
|
|
$
|
8,570,825
|
|
|
|
|
|
|
$
|
7,237,459
|
|
|
|
|
|
Net interest income
(tax equivalent)
|
|
|
|
|
|
$
|
250,218
|
|
|
|
|
|
|
$
|
231,089
|
|
|
|
Net interest margin
(tax equivalent)
|
|
|
|
|
|
|
|
|
|
4.39
|
%
|
|
|
|
|
|
4.86
|
%
|
|
|
(1)
|
Adjusted to conform
to the current period presentation. The adjustment was limited to
including amounts historically disclosed as "Covered loans" in
"Loans, net."
|
|
|
(2)
|
Nonaccrual loans have
been included in the table as loans carrying a zero yield.
Amortized net deferred loan fees and net unearned discounts on
certain acquired loans were included in the interest income
calculations. The amortization of net deferred loan fees was $3.8
million and $3.3 million for the nine months ended September 30,
2015 and 2014, respectively. The incremental accretion on certain
loans was $21.2 million and $33.0 million for the nine months ended
September 30, 2015 and 2014, respectively.
|
|
|
(3)
|
During the nine
months ended September 30, 2014, the Company recorded a $2.6
million reversal of premium amortization, which increased interest
income on taxable securities.
|
|
|
(4)
|
Tax-exempt income is
calculated on a tax equivalent basis. The tax equivalent yield
adjustment to interest earned on loans was $2.3 million and $1.3
million for the nine months ended September 30, 2015 and 2014,
respectively. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $4.8 million and $4.5 million
for the nine months ended September 30, 2015 and 2014,
respectively.
|
Non-GAAP Financial Measures
The Company considers its operating net interest margin and
operating efficiency ratios to be important measurements as they
more closely reflect the ongoing operating performance of the
Company. Despite the importance of the operating net interest
margin and operating efficiency ratio to the Company, there are no
standardized definitions for them and, as a result, the Company's
calculations may not be comparable with other organizations. Also,
there may be limits in the usefulness of these measures to
investors. As a result, the Company encourages readers to consider
its consolidated financial statements in their entirety and not to
rely on any single financial measure.
The following tables reconcile the Company's calculation of the
operating net interest margin and operating efficiency ratio:
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating net
interest margin non-GAAP reconciliation:
|
|
(dollars in
thousands)
|
Net interest income
(tax equivalent) (1)
|
|
$
|
84,254
|
|
|
$
|
78,232
|
|
|
$
|
250,218
|
|
|
$
|
231,089
|
|
Adjustments to arrive
at operating net interest income (tax equivalent):
|
|
|
|
|
|
|
|
|
Incremental accretion
income on FDIC purchased credit impaired loans
|
|
(2,082)
|
|
|
(4,205)
|
|
|
(6,896)
|
|
|
(16,428)
|
|
Incremental accretion
income on other FDIC acquired loans
|
|
(34)
|
|
|
(175)
|
|
|
(166)
|
|
|
(474)
|
|
Incremental accretion
income on other acquired loans
|
|
(4,293)
|
|
|
(5,040)
|
|
|
(14,116)
|
|
|
(16,136)
|
|
Premium amortization
on acquired securities
|
|
2,396
|
|
|
1,454
|
|
|
7,964
|
|
|
4,633
|
|
Correction of
immaterial error - securities premium amortization
|
|
—
|
|
|
(2,622)
|
|
|
—
|
|
|
(2,622)
|
|
Interest reversals on
nonaccrual loans
|
|
325
|
|
|
423
|
|
|
1,131
|
|
|
1,103
|
|
Operating net
interest income (tax equivalent) (1)
|
|
$
|
80,566
|
|
|
$
|
68,067
|
|
|
$
|
238,135
|
|
|
$
|
201,165
|
|
Average interest
earning assets
|
|
$
|
7,711,531
|
|
|
$
|
6,451,660
|
|
|
$
|
7,600,954
|
|
|
$
|
6,345,909
|
|
Net interest margin
(tax equivalent) (1)
|
|
4.37
|
%
|
|
4.85
|
%
|
|
4.39
|
%
|
|
4.86
|
%
|
Operating net
interest margin (tax equivalent) (1)
|
|
4.18
|
%
|
|
4.22
|
%
|
|
4.18
|
%
|
|
4.23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
efficiency ratio non-GAAP reconciliation:
|
|
(dollars in
thousands)
|
Noninterest expense
(numerator A)
|
|
$
|
64,067
|
|
|
$
|
59,982
|
|
|
$
|
199,272
|
|
|
$
|
175,132
|
|
Adjustments to arrive
at operating noninterest expense:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses
|
|
(428)
|
|
|
(3,238)
|
|
|
(9,045)
|
|
|
(4,876)
|
|
Net benefit of
operation of OREO and OPPO
|
|
(228)
|
|
|
1,247
|
|
|
1,574
|
|
|
1,342
|
|
FDIC clawback
liability expense
|
|
(174)
|
|
|
(201)
|
|
|
(167)
|
|
|
(302)
|
|
Loss on asset
disposals
|
|
(274)
|
|
|
(106)
|
|
|
(381)
|
|
|
(557)
|
|
State of Washington
Business and Occupation ("B&O") taxes
|
|
(1,212)
|
|
|
(1,069)
|
|
|
(3,668)
|
|
|
(3,116)
|
|
Operating noninterest
expense (numerator B)
|
|
$
|
61,751
|
|
|
$
|
56,615
|
|
|
$
|
187,585
|
|
|
$
|
167,623
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(tax equivalent) (1)
|
|
$
|
84,254
|
|
|
$
|
78,232
|
|
|
$
|
250,218
|
|
|
$
|
231,089
|
|
Noninterest
income
|
|
22,499
|
|
|
15,930
|
|
|
66,728
|
|
|
44,565
|
|
Bank owned life
insurance tax equivalent adjustment
|
|
585
|
|
|
544
|
|
|
1,815
|
|
|
1,649
|
|
Total revenue (tax
equivalent) (denominator A)
|
|
$
|
107,338
|
|
|
$
|
94,706
|
|
|
$
|
318,761
|
|
|
$
|
277,303
|
|
|
|
|
|
|
|
|
|
|
Operating net
interest income (tax equivalent) (1)
|
|
$
|
80,566
|
|
|
$
|
68,067
|
|
|
$
|
238,135
|
|
|
$
|
201,165
|
|
Adjustments to arrive
at operating noninterest income (tax equivalent):
|
|
|
|
|
|
|
|
|
Investment securities
gains, net
|
|
(236)
|
|
|
(33)
|
|
|
(1,300)
|
|
|
(552)
|
|
Gain on asset
disposals
|
|
(120)
|
|
|
(28)
|
|
|
(125)
|
|
|
(78)
|
|
Change in FDIC
loss-sharing asset
|
|
1,635
|
|
|
4,816
|
|
|
2,979
|
|
|
14,685
|
|
Operating noninterest
income (tax equivalent)
|
|
24,363
|
|
|
20,664
|
|
|
70,097
|
|
|
59,704
|
|
Total operating
revenue (tax equivalent) (denominator B)
|
|
$
|
104,929
|
|
|
$
|
88,731
|
|
|
$
|
308,232
|
|
|
$
|
260,869
|
|
Efficiency ratio (tax
equivalent) (numerator A/denominator A)
|
|
59.69
|
%
|
|
63.33
|
%
|
|
62.51
|
%
|
|
63.16
|
%
|
Operating efficiency
ratio (tax equivalent) (numerator B/denominator B)
|
|
58.85
|
%
|
|
63.81
|
%
|
|
60.86
|
%
|
|
64.26
|
%
|
__________
(1) Tax-exempt interest income has been adjusted to a tax
equivalent basis. The amount of such adjustment was an addition to
net interest income of $2.6 million and $2.0
million for the three months ended September 30,
2015 and 2014, respectively, and an addition to net
interest income of $7.2 million and $5.8 million for the nine
months ended September 30, 2015 and 2014,
respectively.
|
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SOURCE Columbia Banking System, Inc.